Fortum has entered into agreements with Elliott and Knight Vinke to acquire a new stake in Uniper in excess of 20.5% for approximately Euros 2.3 billion. This will increase Fortum’s share in Uniper to more than 70.5% its total investment in the company to approximately Euros 6.2 billion.
Fortum will acquire all the shares held by funds managed by Elliott Management Corporation and its affiliates (“Elliott”) and Knight Vinke Energy Advisors Limited and its affiliates (“Knight Vinke“), a total in excess of 20.5%. The agreed price corresponds to Euros 29.93 per share.
Fortum’s preference was to agree with Uniper on a joint path forward, but discussions have so far ended short of action. Fortum is convinced that this change in Uniper’s ownership structure as well as a resolution of the complex relationship between all parties will return stability and put focus solely on the business and the opportunities available to it.
Closing of the transaction is subject to customary regulatory clearances in Russia and the United States, and is expected by the end of the first quarter of 2020. Fortum is in discussions with the Russian state authorities and has made a preparatory filing to the Russian Federal Antimonopoly Service. No further European Commission clearance is required. In 2018, Fortum eceived unconditional merger clearance from the Commission.
The transaction will be financed with existing cash resources and committed credit facilities underwritten by Barclays Bank PLC. Fortum is committed to maintaining an investment grade rating post transaction and strengthening its financial profile longer term. This will provide appropriate financial stability and support to the enlarged group. Fortum will fully consolidate Uniper as a subsidiary in its financial statements from closing of the transaction.
“I am pleased that we have today taken this important step to create a leader in the European energy transition. I am convinced that this will create attractive opportunities for both companies and their employees. For Fortum’s shareholders this transaction will be earnings accretive. As always, this investment follows our prudent investment criteria to add value reflecting carefully managed risks,” said Pekka Lundmark, Fortum’s president and CEO.
Fortum intends to be represented on Uniper’s supervisory board commensurate with its ownership without delay.